N.W.T. First Nation files lawsuit alleging business partner treated venture as 'personal fiefdom'
Denesoline Corp. claims Tlicho Investment Corp. is running Ventures West into the ground
The business arm of the Lutsel K'e Dene First Nation is suing the business arm of the Tlicho government for allegedly running a partnership into the ground by paying family members exorbitant salaries.
The Denesoline Corporation claims the Tlicho Investment Corporation hired family members of Tlicho chiefs to manage Ventures West — the Alberta-based transport company the groups co-own — even though they were unqualified.
In court documents, Denesoline claims those family members were paid "exorbitant salaries" and that's caused the company to "incur significant losses."
None of these allegations have been proven in court.
"Fiefdom" of Tlicho chiefs
The Tlicho own a 90 per cent share of the Ventures West partnership while Denesoline holds the remaining 10 per cent.
The Fort Saskatchewan-based company was started in 1989 and specializes in fuel transportation in Western Canada and the North.
Its operations are controlled by Tlicho Investments, but Denesoline says the two groups have an agreement that states Denesoline must consent to any changes to signing authority, capital budget, large expenditures and salaries.
In documents filed with the Court of Queen's Bench of Alberta, Denesoline claims the transport company has become "the personal fiefdom of the [Tlicho] Chiefs and their friends and relatives." The documents claim Tlicho Investments has appointed friends and relatives of the chiefs to management level positions they aren't qualified for.
"Such appointments have resulted in gross mismanagement with the result that the business of the partnership has been seriously compromised and continues to incur significant losses," Denesoline states in court documents.
It also claims Tlicho Investment has failed to pay out about $370,000 in dividends Denesoline says it is owed.
Denesoline is asking an Alberta judge to award them those dividends as well as an additional $500,000 in damages. It is also asking for a receiver to take over Ventures West and sell the company's assets. In addition, Denesoline is asking the judge to order the Tlicho to buy Denesoline out of the partnership.
The legal defence for Tlicho Investment was due to be filed in an Alberta court last month, but has not yet been filed. The lawyer for Tlicho Investments has declined comment.
Requests for comment from Tlicho Investment and Tlicho Grand Chief Eddie Erasmus have gone unanswered.